Tuesday, August 8, 2017

Krugman calling a thing bullshit, Tuesday edition

It seems like ancient history now, but five years ago there was a remarkable Beltway consensus that high unemployment was structural, the result of a mismatch between the skills workers had and the skills the economy needed. What made this consensus remarkable was that all the evidence pointed the other way: none of the telltale signs of a skill mismatch, like rising wages for some groups despite high unemployment, were in sight. Meanwhile, lots of other evidence – like the fact that unemployment was falling fastest in the same places and occupations where it rose most – pointed to a cyclical story, that is, that the economy was simply suffering from inadequate demand.

Yet so strong was the groupthink that news analyses often presented the structural story as if it were the known truth, without even acknowledging the contrary case.

So here we are, with no obvious up-skilling of the work force, but with unemployment now below pre-crisis levels, with prime-age employment not too far below where it was, and still no wage pressure. People got mad when I called the structural story humbug, but humbug it was.

Why does this matter now? Well, the people who were sure that it was structural are still out there, opining on economic policy. And while we all make mistakes, is there any sign that any of these people have so much as admitted getting this wrong, let along learned from the experience?

BTW, unless you live under a rock you know that right wing economists hate and despise Krugman even more than they hate the Satanist bisexual pervert Keynes. After all, you can just not talk about Keynes (aside from saying "oh, he believes in money printing! he causes inflation" - which is funny because they need to use a Keynesian model to "prove" it), not teach him in undergraduate (despite him having invented macroeconomics and monetary policy), and jump through hoops to cut all of his theory out of macro to replace it with idiotic 19th-century mathematical fantasy that rivals a D&D simulation of orcs vs trolls.

But you can't simply ignore the Kruggatolah because he is read by more people than all other economists combined. And that makes right-wing fruitcakes angry.

But now, even leftist economics professors (I met one! - well, at least he seemed a bit leftist on a few things) are beginning to hate Krugman for his hardcore partisanship.

Me? Far as I'm concerned, most of these other folks are gutless wimps, and at least K-dog is using the bully pulpit at NYT to lob grenades. Let's see these other fucking sissies grow a pair, get a real job in the press, and start fighting back against the 50-year wave of right wing kleptocratic mythology that their field has perpetuated.